The Dow Jones Industrial Average (DJIA) extended its decline on Friday, shedding 400 points as disappointing U.S. jobs data and renewed trade war concerns rattled investor sentiment. The index dropped over 1.5%, retreating to the 44,300 level, with further downside risk toward the key 44,000 mark.
Market Pressure: Weak Jobs Data and Gloomy Consumer Sentiment
The U.S. labor market showed signs of slowing as January’s Nonfarm Payrolls (NFP) added only 143,000 jobs, falling short of the 170,000 forecast. However, December’s NFP figure was revised sharply higher to 307,000, and the Unemployment Rate ticked down to 4.0% from 4.1%, offering some relief.
Consumer confidence also took a hit, with the University of Michigan’s Consumer Sentiment Index plunging to a seven-month low of 67.8 from 71.1. The survey revealed growing concerns over inflation, with 12-month expectations jumping to 4.3% from 3.3%, while five-year expectations rose slightly to 3.3%.
Trump Revives Trade War Fears
President Donald Trump reignited trade war worries by announcing plans for reciprocal tariffs on multiple countries. While he signed an executive order for minor tariffs on China, he hinted at a broader package of trade measures targeting nations with tariffs on U.S. goods. The move unsettled markets, raising concerns about potential retaliatory actions that could impact global trade.
Dow Jones Performance: Amazon Leads Losses
Market sentiment fluctuated throughout the session before taking a sharp turn downward following Trump’s tariff announcement. The decline was exacerbated by Amazon’s (AMZN) stock drop, which slid 4% to below $230 per share. Despite reporting stronger-than-expected Q4 earnings and revenue, the tech giant issued a cautious outlook for Q1, spooking investors.
Technical Outlook: Key Levels to Watch
The Dow’s failed attempt to breach the 45,000 resistance level has triggered a pullback, with immediate support near the 50-day Exponential Moving Average (EMA) at 43,730. If selling pressure continues, the next key support lies at the 44,000 psychological level. A rebound would require a break back above 44,500 to regain bullish momentum.
